GBP/USD Forecast: BOE shy on tightening, pound ticks higher

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3932

BOE kept its monetary policy unchanged, hinted at “modest” tightening.
Policymakers foresee temporary higher inflation up to 4% YoY.
GBP/USD is neutral-to-bullish, sellers await around 1.4000.

The GBP/USD pair regained the 1.3900 level, currently trading at around 1.3930, the pound was little moved by the Bank of England that announced its decision on monetary policy. As widely anticipated, the central bank left its benchmark rate unchanged at 0.1%, and facilities programs were also on hold. Policymakers forecast inflation could rise to 4% in the last quarter of the year but added it would prove temporary. They indicated that “some modest tightening of monetary policy is likely to be necessary” over the next couple of years.

The pair seesawed between gains and losses after the BOE, gaining most ground during the American session amid a better market’s mood. The UK won’t publish macroeconomic data on Friday. Meanwhile, the country is reporting roughly 30,000 new coronavirus cases per day, although there’s no pressure on the health system while the number of deaths is reduced.

GBP/USD short-term technical outlook

The GBP/USD pair is neutral-to-bullish in the near-term. The 4-hour chart shows that technical indicators lack directional strength and remain stuck around their midlines. At the same time, the pair is developing above all of its moving averages, which anyway remain flat, with the 20 SMA providing dynamic support around the 1.3900 level. The bullish potential is limited as sellers will likely continue to defend the 1.4000 threshold.

Support levels: 1.3900 1.3865 1.3820

Resistance levels: 1.3960 1.4000 1.4045

View Live Chart for the GBP/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD remains depressed below mid-1.1800s; downside potential seems limited

The EUR/USD pair attracts some sellers for the second consecutive day on Tuesday and hovers below mid-1.1800s amid a relatively quiet trading action during the Asian session. The broader fundamental backdrop, however, warrants some caution for bearish traders before positioning for deeper losses.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold declines as trading volumes remain subdued due to holidays in China

Gold price extends its losses for the second successive session, trading around $4,930 per troy ounce during the Asian hours on Tuesday. Gold price is trading nearly 0.7% lower at the time of writing as trading volumes stayed thin due to market holidays across China, Hong Kong, and other parts of Asia.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.